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NEWS and EVENT

8 October 2019

The Japan TCFD Consortium announces the release of the Guidance for Utilizing Climate-related Information to Promote Green Investment (Green Investment Guidance)

8 October 2019 – Today, The Japan TCFD Consortium announces the release of the Guidance for Utilizing Climate-related Information to Promote Green Investment (Green Investment Guidance). The Guidance provides commentaries on perspectives needed by investors and other stakeholders when understanding the information disclosed based on the TCFD recommendations. This Guidance is also expected to help companies better understand the perspective of investors and other stakeholders.

This Guidance was introduced by Mr. Kunio Ito, Chair of the Japan TCFD Consortium, at the TCFD Summit held today.

1.Background

The number of organizations supporting the TCFD recommendations is increasing, but disclosure based on the TCFD recommendations is still at an early stage. Investment to support corporate activities to address climate change (green investment) using the information disclosed is expected to increase, along with the future progress of disclosure. In doing so, it is important that investors and other stakeholders appropriately evaluate and utilize information disclosed by companies for their investment decisions.

Following this line of thought, the Japan TCFD Consortium has received inputs and conducted discussions with members through its steering committee and information utilization working group, and have prepared the “Green Investment Guidance” which provides commentaries on perspectives needed by investors and other stakeholders when understanding the information disclosed based on the TCFD recommendations.

2.Outline of the Guidance

Chapter 1 Introduction
In addition to discussing the purpose and context of the Guidance, this chapter states that the Guidance aims to realize a “virtuous cycle of environment and growth,” based on the following three perspectives.
・Promotion of constructive dialogue (engagement) leading to enhanced corporate value
・Identification and assessment of the risks and opportunities posed by climate change
・Promotion of innovation for decarbonization, and creation of mechanisms for appropriate flow of funds

Chapter 2 Structure of This Guidance
The structure of this Guidance is discussed, drawing upon International Integrated Reporting Council (IIRC) Framework and Guidance for Integrated Corporate Disclosure and Company-Investor Dialogue for Collaborative Value Creation (Guidance for Collaborative Value Creation) as references, and comparing those with items recommended for disclosure by the TCFD.

Chapter 3 Detailed Discussions
Building upon chapter 2, four elements are identified as important in utilizing climate-related information, namely “Governance”, “Strategies and Business Models”, “Risks and Opportunities”, and “Performance and KPIs”. Explanations are provided on these elements, including examples of investment practices utilizing those information as well as viewpoints on assessments that recognize industry-specific situations.

3.Future direction

This Guidance is prepared to be the first step towards promotion of “green investment”. It is intended that the Guidance will be expanded and revised through discussions within the Consortium, in line with developments in disclosure according to TCFD recommendations and green investment.